NBFIs must build resilience – Dr. Atuahene

Non-Bank Financial Institutions

Much more needs to be done in creating a resilient and sustainable Non-Bank Financial Institutions (NBFIs) space, banking consultant Dr. Richmond Atuahene has said – advocating good corporate governance practices, effective board oversight, upgraded technological infrastructure and quality human resources, among others.

Dr. Atuahene stated that NBFIs must adopt robust enterprise risk management (ERM) processes and controls to be more responsive to change and help enable them build resilience.

“Given its importance to the overall economy, governments around the world regulate the financial sector quite highly. As a result, it’s essential for banks to understand how they must manage risk. NBFIs must prioritise their enterprise risk management process to stay on top of numerous critical risks they face every day. NBFIs’ risk management goes far beyond compliance, as banks must be aware of strategic, operational, pricing, liquidity and reputational risks,” he noted.

He spoke at the maiden Ghana Microfinance Institutions Network (GHAMFIN) forum themed ‘Building resilience and sustainable nonbank financial institution’s sector in the wake of the current economic challenges’, and said corporate governance is critical for the success of small business.

An effective corporate governance system, he explains, ensures that policies and procedures are in place to mitigate risk; and enables the organisation to comply with relevant laws and regulations.

He added that it is essential financial institutions, including NBFIs, improve their managerial as well as risk management skills; and develop workable business plans and strategies which encompass short-, medium- and long-term plans.

The current economic challenges, according to him, offer a perfect window for NBFIs to look for effective and cost-efficient methods of controlling expenses and streamlining all the processes involved, including auditing. He added that online expense management solutions offer significant opportunities to drive policy compliance and prevent fraud if it occurs.

In addition to the above, Dr. Atuahene, indicated that an enabling environment of business-friendly policies, laws, lower inflation, reduced monetary policy rates and reasonable taxation schemes, as well as a stable, risk-aware and transparent financial system are sine qua non.

About the microfinance forum

The Executive Director of GHAMFIN, Yaw Gyamfi, commenting on the forum stated that it aims to address issues pertaining to the sector and throw more light on opportunities for members of the network.

He said GHAMFIN as the umbrella network, in collaboration with member-associations, realised the need for a periodic microfinance forum to educate, inform and elicit useful feedback from stakeholders as well as the regulator and policymakers toward developing a more robust, vibrant and sustainable Sector.

He added that the network is anticipating most non-bank financial institutions will be affected by the current economic challenges, and hence has been working closely with members to minimise any negative impact.

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